Marine Home Center entertaining offer by Boston-based investors

A Boston-based investment company has expressed interest in acquiring Marine Home Center, the island’s largest building-supply, housewares and home-furnishings company.

Marine Home Center owner Denis Gazaille said yesterday that he has received a letter of intent from the Audax Group expressing interest in “recapitalizing” and “expanding” the Lower Orange Street business founded more than 50 years ago by the late Albert F. “Bud” Egan.

Gazaille, who closed the business early Tuesday to meet with employees to tell them about Audax’s interest, said he plans to “explore” the letter of intent carefully, and if he accepts Audax’s proposition to acquire a controlling interest in the company, a deal could be struck within 60 to 90 days.

Should that happen, Gazaille said Marine Home Center would continue to be run locally and customers should expect no changes. Should Audax acquire Marine Home Center, Gazaille said he would stay on as a minority investor.

“I understand they are interested in expanding the business,” Gazaille said yesterday. Should a deal occur, “They plan on talking to the local management about assuming more responsibility and taking a more active role in running the local business. All of their businesses are run from the communities in which they are located. All their businesses are run independently.”

Gazaille stressed that Audax has not yet made a formal offer for Marine Home Center, and he declined to reveal any financial details at all about the privately-owned company. Registry of Deeds records indicate, however, that he took out a $10 million mortgage on the company in 2005.

Marine Home Center began life more than a half-century ago as a lumberyard owned by Egan and Lawrence Miller. The late developer Walter Beinecke was also once involved in the operation. Gazaille, who owned a portion of the company before Egan’s death, purchased the remainder when he died several years ago.

Marine Home Center is one of the island’s largest employers and arguably its biggest retail business. According to assessor’s office records, it owns property on both sides of Lower Orange Street near the Landmark House and Our Island Home elderly care facilities.

The bulk of its operations are consolidated on the north side of the street, including the lumber yard, hardware, housewares, home furnishings and garden departments. Its administrative offices and appliance center are located across Orange Street in Bayberry Commons.

According to the assessor’s records, Marine Home Center’s Nantucket holdings were last assessed at $19.9 million. It also owns an airplane, a warehouse and two hardware stores on Cape Cod.

Audax was founded in 1999 and specializes in acquiring companies with revenues between $25 million and $500 million. Its diverse holdings range from The Boston Herald newspaper group to an Illinois-based radio broadcasting equipment manufacturer, a Burbank, Calif. motion-picture lighting and grip rental company, and numerous other technology and manufacturing companies nationwide.

It raises investment capital from public and private pension funds, endowments and foundations, other investment funds, private investors, its own employees, and financial institutions.

Edward A. Feuerstein, an Audax principal who works in the business development division, declined to comment, citing a confidentiality agreement. He did say, however, that Steven Cohen, an attorney with Reade, Gullicksen, Hanley and Gifford, was Audax’s local counsel on the matter. Cohen, who is married to Gazaille’s daughter Jennifer, also declined to comment, citing the same confidentiality agreement.

According to its website, Audax “seeks controlling interests in companies in which sound strategy and superior execution can dramatically enhance revenue and cash flow at our partner companies” and “In partnership with management teams, Audax seeks to create equity value through superior strategic and operating performance – using our experience in operations, strategy consulting, private equity, and capital markets to enhance the value of the enterprise.”

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